Read this essay to learn about export marketing. After reading this essay you will learn about:- 1. Introduction to Export Marketing 2. Expansion of Export Marketing in the Overseas Markets 3. Distribution Logistics of Export Marketing 4. Cementing the Relations for Export Marketing.
List of Essays on Export Marketing
Essay Contents:
- Essay on the Introduction to Export Marketing
- Essay on the Expansion of Export Marketing in Overseas Markets
- Essay on the Distribution Logistics of Export Marketing
- Essay on Cementing the Relations for Export Marketing
1. Essay on the Introduction to Export Marketing:
As the name suggests the export marketing is based on products and services and is oriented towards manufacturers, whereas prospecting includes both but is oriented towards global traders. The basic format is common to both and includes;
It is based on seven elements, the product, quality, market, competition, price, distribution, and the promotional efforts. The exporter and the competitor are the two segments active in a market. These seven elements are common to them.
When we explore the global markets it is not sufficient to know what we have to offer but it is crucial to know what the competitors are offering in that particular segment where we intend to concentrate.
And if competitors are not there or not in sufficient strength, we must get answers to the reasons for that situation. In fact the total market research and prospecting study revolves around the competitors, whatever they do in a given market gives answers to what we can or should do in that market.
Corporate Decision:
The starting point in any case is the corporate decision for going into the overseas markets for expansion of the business. Once a decision has been made the next point is self-evaluation. Are we ready for entering the overseas markets? Following are the basic questions-answers which will clarify the company’s position on the export front.
(a) Do we have the product and/or can we manufacture the product?
Any product is not good for any export market. There are specific products for specific markets. Many exporters fail at this point, they try to find markets for their products rather engineering the product for specific markets or at least making it worth the world markets.
There is another way to look at this problem, “Can we manufacture the product?” This question is generally asked by the well established manufacturers or design people who have the basic caliber to engineer a product based on market / consumer feedbacks.
Take the case of SONY when they produced: Walkman, the mini portable personal hi-fi music system, all they had was the market feedback from their retailers and their own R&D teams that a ultra light musical player/ recorder product that can be worn on the person on the move and which can play continuous music has great potential with the school and college going market segment.
Sony took up the challenge and the result is the most common looking mini stereo system called the Walkman. This is what makes an organization competent enough to produce for the world markets.
What is a product? It is a package of conveniences that makes our work easier, reduces our tension, saves our time, and gives pre-determined service repeatedly without fault. What are the things that make a product as such? There are many but design, fault free performance on repeated usage, safety, ease of operation and maintenance, availability of spares (if consumable spares are needed), after-sales service.
Other than these are the product image, the image of the organization, promotional support over the electronic and other media and most important of all is the association of the product and/or service with the society.
This point is of vital importance when consumer durable products are involved. The manufacturer of such products has to intermix with the society in numerous forms so that their products or brands enter the household name’s dictionary of the consumers.
(b) What is the strength of the product or groups of products in the domestic market?
(Market share versus the competitors). The strength of a product lies in its ability to stand up against stiff resistance from the compatible products in the market. The manufacturer (through product engineering and positioning) and the domestic customers (through their acceptance and preferences in favour) provide this strength.
Home markets are the test markets for export. If a product fails in the domestic market it surely will fail in the global market as well. Many of the famous names in entertainment industry first test their products in the specified home market and bring perfection in its performance before engineering it for specific export markets.
Therefore if you are planning to launch a product or service for the export market, at first get it pilot-tested in domestic market, the local customers can provide vital information on the acceptability of the product. The products generally suffer from teething problems only the end users know where it hurts and this feedback can propel your product to higher levels of acceptance when launched at the global scale.
(c) Who are our competitors in the domestic market?
(Local and overseas). When you test market the product in the home market you are actually pitching it against the other established products in the market. These products may include some of the foreign brands (imported and locally produced/assembled) and others of local origin.
This is the acid test for your product. When you finally move your product in the overseas markets these very foreign brands in your market would become domestic brand and yours would be treated as the foreign brand.
(d) In case overseas manufacturers are competing in the local market what are their strengths and weaknesses? How are we hitting them and how are they countering our moves?
(e) In case of the local products/manufacturers how are they competing in the local markets with our products and with the overseas products?
(f) How successful are we in the local market.
What are the selling tools that we use, what are the plus points or points of strength and weakness, are we fighting on price level or on quality, does our product have brand image – if yes- then what are we doing to strengthen this brand image in the local market.
(g) Do we have the infrastructure?
The infrastructure will include the required manpower, with knowledge in documentation, tax laws, legal experts, technical, financial, and commercial experts, communicational setup, packaging and labeling specialists, banker’s support, tie up with freight forwarders and shipping line. In addition to this there would be need for the market specific managerial staff who must be conversant with the local culture and language, laws, business practices.
In many small to medium organizations, no effort is made to identify above requirements, at the most a manager is created from the available pool or hired from outside to look after the export efforts.
This is half-hearted attempt and at the first obstacle the export euphoria evaporates. Also there are cases when organizations take the help of global traders to push their products in the overseas markets. In such cases the success or failure would depend upon the trader involved and his commitments to the task.
A serious trader would not touch any product but only specific products and/or services for which he has the required experience, manpower, and in-depth knowledge of the destination markets. There are also cases when a trader for export sourcing might use a manufacturer.
In all these alternatives there are two approaches, one, to work alone, and the second to work with well-established export houses. This decision better be taken at the corporate level when decision is made for entering the export market.
Market Entry:
Once a decision has been made, infrastructure created, product or market identified the next step is to make an entry. This is the most important and delicate step.
The various alternatives available to a manufacturer are the local agents and distributors, franchising, licensed production, opening of branch offices in the selected markets, joint ventures, and takeover of an existing compatible unit in the target market.
The most time tested route is the appointment of a local agent/distributor as the beachhead for entering the market and building up the relationship for a full force presence. This can be done in two ways, firstly let the exports began, there will be numerous teething problems some associated with the target market and some with your organizational support.
Overcome all such hurdles and gradually increase the interactions and export volumes. Your support to the local agent/distributor and his dedication for you are the two most important factors that will decide your future in that market.
At the first opportunity station your representative to coordinate the marketing efforts of the agent/distributor. This is the beginning of a new phase in your marketing efforts. This method was used by the colonial powers to the hilt and is still valid in the new millennium.
The representative can be upgraded to branch office operations to be followed up by full-scale overseas operations. At that stage the utility of the local agent/ distributor will be put to acid test.
Either he graduates to become partners for the new phase of expansion or is to be replaced by your own local operations. This will be a do or die decision for both of you, any wrong interpretation of the market situations and the hidden powers of the local agent can back fire on your future in that market.
E-commerce is the new tool available to the manufacturers for exploring the global markets. This topic we shall cover separately in this part.
Industrial Products:
These products differ from the consumer and consumer durable, by nature they are traded in large numbers, quality levels are demanding, have high unit value, are industries specific, and require special mode of packing and transportation. Moreover the consuming markets are also lesser and far scattered geographically.
The export marketing approach to them is different and requires expert handling. An organization wishing to enter the global markets for these products depends heavily on the secondary sources of industrial data. The export marketing efforts are highly focused and top level management generally plays an important role in making the ball rolling.
Typical Characteristics:
Long manufacturing cycle:
Require specific distribution channels.
Small number of importers/exporters.
High value of single imports/exports.
Long product life cycle.
Concentration of consuming markets.
Highly organized purchase policies of the importers.
Cyclic business.
Require long term production planning.
Require techno-commercial sales force.
Not much of after sales service is required.
Importers and exporters generally work on long term relationships.
Require highly specialized distribution system.
The markets for the industrial goods are the governmental agencies, institutions, industry, and agro sector. These are establishments well organized into various types of consumption units like factories, processing units, refineries, assembling shops etc.
By nature they are less complex as compared to the consumer goods markets. The identification of the consuming markets is rather easy but the implementation part is more complex, this is just contrary to what is found in the consumer sector.
The characteristics, as indicated above, play a significant part in the applicability and effectiveness of the marketing methods. Same characteristics also determine techniques to be used for marketing and sales promotion.
In addition to the existing consumption centres the future expansion and or new factories or consumption units also present potential markets. These markets are identified from the inception stage when the plant deal is negotiated.
The plant may take 2 to 3 years to come on-stream but the suppliers of the industrial goods start sales moves from the day one so that by the time the plant is operational the bulk requirements are also tied up. The main reason for this situation is the longer time cycle required for testing sampling test batch approvals and longer delivery periods.
That is why the industrial consumers plan imports well in advance keeping in view the normal delivery period. Say for example if the average delivery period is 6 months then the importer will place firm orders at least 8 months in advance and make preparations for the next imports as well.
One of the most important factors associated with these products is the purchasing behaviour of the importer. The purchase official is highly professional in his approach and has systematic procedure for doing the individual purchases.
In many public sector and large MNCs the import procedure is based on techno-commercial tendering basis. There are two sets of bids, one containing the technical part and the other commercial and price part. The negotiation starts with the technical part and only those firms that qualify on technical requirements qualify to move into commercial negotiations.
Similar situation exists with other consumers. The net result of which is that the gestation period for the industrial exports is rather extended and one has to plan well in advance for marketing part of the business.
The Derived Demand also plays vital role in defining the purchase pattern for the industrial goods. The demand for the capital goods is derived from the demand for the goods they produce. Similar is the situation for the industrial products. The demand for these products will depend on the demand of the goods that they help to produce.
For example, if the demand for power projects increases so will be the demand for the various components required for the production of the turbines and generators. If the demand for cars increases so will be the demand for various components that are used for making the car especially the demand for the deep drawn cold rolled steel sheets for the car bodies.
As such the industrial selling is a reactive force in the market place and export strategies have to be formulated accordingly.
2. Essay on the Expansion of Export Marketing in Overseas Markets:
Export marketing strategies are the market extension activities and they originate from the home market conditions. The fertile home market grooms strengthens and vitalize the product or service line and when that market starts to show the signs of saturation or limitations then the market extension route is taken to keep the growth curve in the upward motion.
There are also cases when the overseas markets are just explored as stand by arrangements to take care of the slackening domestic markets. Such actions do not require any strategy at all; they are simply a leisure time activity of the corporate managers.
The times are changing and such leisure time activities have no or marginal place in the corporate philosophy. The confines of the captive or protected domestic markets is giving way to global marketing concepts and home barriers are gradually breaking down or are coerced to close down in support of the newly emerging concept of the global market.
In recent times the urge for earning the hard currencies has taken the national priority in which the national efforts are focused towards the export markets and the domestic manufacturers/exporters/ traders are encouraged to develop the overseas markets.
This last mentioned activity is more prevalent in the newly emerging markets of the developing countries. The motivating force behind this movement is the WTO which is fueling the world trade cycle to run at higher and higher levels with active participation of all the countries irrespective of their status as the developed, developing or lesser developed countries.
In the domestic markets the business skeletal system (government legal, tax, utilities, labour etc.) is a constant entity, the only thing that changes is the geographical location.
But when you cross the national frontiers you are confronted with the new skeletal system besides the differing culture, economic levels, local tastes and preferences and most lethal of all the domestic and overseas players in those markets all of which become a variable factor with opposing forces and your product has to negotiate those opposing forces.
This phenomenon also works in the reverse direction when your own domestic markets are concerned. Then how one goes about to develop such markets would very much depend upon the product the market and the way in which the product is given exposure. This collectively would constitute your export marketing strategy.
Whatever form of strategy that you may formulate the basic purpose would still remain to get an edge over the competitor’s price at acceptable quality level well supported by anticipated volume of business in the target market.
Thus everything boils down to price line and this line is your target.
Several strategies can be formulated for the development and command over the others in a given overseas market but basically all such strategies can be grouped into three main categories:
Strategical Planning:
1. Through the technological route,
2. Through the geographical placement, and
3. By way of joining hands in or for the overseas markets.
These three approaches would give you three alternatives for formulating your strategies. The technological approach would give you the capacity and the capability to produce the goods in volume and at quality levels compatible with the competitors.
The geographical placement would give you the advantage of nearness to the target market and may also give you the advantage of reduced or nil customs tariffs and lastly the strategy of joining hands with other market players would give you the enhanced manipulative powers both in terms of larger market access and as a alternative sourcing base for your inward and/or third country requirements of the products /components/services etc. What strategy that you finally adopt would be decided by your actual position and the growth potential in the domestic and the target markets in the overseas.
The strategically planning has its own pattern of development divided into phases and stages, each phase being more potent and lethal than its predecessor. The market penetration power increases with each step. The overdose or underdoes both can cause its premature death.
Therefore you have to be extra cautious in its selection for getting the optimum results and you have to be vigilant enough to have the feel of the market when one phase has run its cycle paving way for the next to take the central place.
There are basically four phases and stages associated with strategically planning.
These are briefly described in the following lines:
Phase 1:
This covers the export strategies formulated at the home base cutting across the national barriers. How far it stretches would be decided by the economics of distance management controls in the target markets.
Any strategy that leans for controlling powers on the uncontrollable market powers of the operative in the target markets is bound to fail due to the lack and/or overstretching of enforcement and monitoring controls.
This strategy is more useful for the industrial raw materials and the intermediary products or the value added raw materials. The consumer durables may also fall in this category but the former ones dominate the show.
Phase 2:
Phase 1 is not a permanent solution over longer periods of time because sooner or later competitors catch on and the competition becomes severe and severe threatening the net market dominance or its net market share.
That is the time when the manufacturers have to switch over to the next phase for not only maintaining the share but also to capture more of the market from the competitors.
In this phase the manufacturers have the option of technology transfers in the target markets or to set up assembly lines to meet the requirements of the specific overseas market. This strategy is useful for the manufactured goods including the consumer and consumer durables.
Phase 3:
This is in fact the extension of the 2nd phase but is more powerful in its market penetrative powers. This phase consists of setting up of wholly owned subsidiaries or the joint ventures in association with the local partners and capital. This strategy helps in creating a home away from the home with extended flexibility of controls.
Phase 4:
This phase is more or less the corporate game plan in which the operational units in the overseas markets change hands and the decision making powers change over from the current owners to the new owners who took it over with their financial might.
This strategy requires the decision making at the highest corporate levels. This is somewhat a recent phenomenon and the current globalization of the trade has given strength to this movement.
Cross border takeovers in the year 1999 accounted for 15 billion US $ worth of business and tendency is gaining further momentum when large corporations are opting for mergers and takeover for better market utilization and domination.
The motivating factors behind this movement are the financial powers, time constraints and the inward inability for technological growth and logistics of competition.
Also there is another factor in the sense that when one manufacturer specializing in one line of products and his products need another line of product to make the system run in such cases also the take-over and mergers are the shortest route for market capture and growth.
Examples are the software producers and hardware producers in any given field of industry (music, motion pictures, telecommunication equipment and operative fields etc.). Soft drinks producers use this strategy extensively. When they enter a market they eat up the local bottlers and use their distribution channels for market expansion. Similar is the case with the mineral water producers.
It is not necessary that all the above phases have to work one after the other. It is quite possible for one or more phases to work together depending on the market situation and the product life cycle expectancy.
The export strategy has following main stages in the order of progressive penetrative powers. For comparative study purposes each phase is assigned three common checkpoints the tariffs, domestic and the other overseas competitors as controlling factors.
The net price factor in each case is taken to be the landed price in the target country in order to nullify the transport factor that may vary from competitor to competitor but this factor would be taken up later as the last resort when everything else turns out to be compatible to all players.
Strategy Formulation:
The various stages of the strategy formulation are briefly discussed in the following hereafter:
Stage 1:
This covers the direct marketing of the product in the overseas markets and it generally covers the agricultural products, raw materials and minerals, manufactured goods and the intermediary products and basic components.
The machine tools and plant and equipment also falls in this category of goods. The net landed price in the target market would depend on the transportation cost and the prevailing customs tariffs which generally have direct relations with the domestic market conditions.
The development of the trading blocks had posed stiff resistance to the exporters, since these blocks work for each member country on the basis of most favoured nation basis but not for the outsiders. But since WTO came into force on 1st January 1995 each member country is expected to offer MFN treatment to other members, the situation has changed drastically but still lot has to be done especially in the developing nations.
So accepting the things as they are today one has to find out how the transport and tariffs are going to add to your cost verses the domestic suppliers. As far as the other competitors are concerned they will be affected by the tariffs in the same way as you are affected unless otherwise they enjoy some other benefits direct/indirect that puts them at an advantageous position.
The need factors of the domestic industrial consumers especially for the raw materials and basic products of production is generally very strong and they are always on the lookout for competitive sources and if you fall in this category of producers then perhaps this need factor would assist your continuity in that market.
But situation changes when you enter the manufactured goods segment because at that stage the needs of the industrial consumers are coupled with the consumers of the finished goods from these industrial units.
If you are confined to the industrial raw material or basic goods export markets your efforts would be confined for maintaining the current markets and if you have surplus then only you would be looking for the new customers.
Generally the raw material suppliers and the industrial consumers form long time contracts and both remain tied up to each other. But as we move from the raw materials towards the value added products the market pressure starts building up.
For example the very basic steel material is the pig iron that forms the basic material for the production of various grades of finished steel. If the price of iron ore is say US$ 35 per MT then the price of pig iron is US $ 200 per MT.
So there is a tremendous amount of value addition and just because of this factor many organizations would be fighting in a given market for their share of the cake. This forces the suppliers to find ways and means to beat the competition and maintain the market share. The more the value addition the higher the competition and still higher the tendency of the suppliers to draw strategies for beating the competition.
There is no golden rule as to how to formulate the action plans but the most common ones that are generally used under such situations are like this:
i. Direct sales to bulk buyers.
ii. Sales through buying agents.
iii. Trade inquiries.
iv. Sales through sub contractor.
v. Sales through international trading organizations.
vi. Sales through independent commission agents.
vii. Sales through participation in international trade fair.
Though several sales routes are available but the most promising one is the direct sales to the bulk buyers but this does not imply that other options are off but as a matter of fact one has to try a number of combinations and settle down with the one that gives quicker results.
It is also very common practice to appoint local agents in specific markets. The selection of these local agents would largely depend upon their influential powers with the bulk buyers in a given territory.
These agents have limiting powers of influence either confined to a group of importers or to a specified territory. So depending upon the capacity and capability of the agents their selection should be decided.
One precaution has to be taken in the selection of the agents and that is to check up the past and/or present associations with your competitors. The one who is working for the competitors directly or indirectly should be out of the consideration.
These agents are your eyes and ears in the target market and their periodic reports on the market conditions keep you up date in the target market. In many cases these very agents could be your future partners in the specified markets when you enter the second and subsequent stages of your marketing strategies.
So long your exports in the target market show a healthy sign of growth better continue with your current approach but the moment you face the declining trend that would be the time to evaluate strategy and may be the time has come to move forward in the next stage.
Stage 2:
The second stage relates to the situation when you move your operations near to the target markets (geographical relocation). This is best achieved by the setting up of assembly lines using the locale labour and expatriate supervisory personnel.
The components of production can come from the parent unit in the fully knocked down condition and/or semi knock down condition. This helps you not only in cost savings but also prepares the local unit to move towards gradual local production substituting the locally available components or setting up ancillary units dedicated to your requirements.
Ultimately you stand up to gain further cost benefits by way of reduced or near nil customs tariffs and savings on the transportation costs. These units in the overseas markets also become your extended sourcing centers for the parent units or for third country exports sales in the neighbouring markets.
Stage 3:
This is again an extension of the stage 2 in which you setup the wholly owned production centres and/or set up joint ventures in association with the local partners and capital. The only difference between the stage 2 and stage 3 is the degree of risk involved that is more in stage 3 as compared with the stage 2.
In such ventures the CKD or SKD assembling lines are given up for total production from the local men and material management control in the wholly owned set up is more or less total but in the case of joint ventures it is on shared basis.
The success of the joint venture would depend upon the degree of infusion of the technology and its operational techniques in to the local management with key decision making still lying in your hands till at least the time the unit fully operational.
Stage 4:
This stage 4 is the most adventurous stage in the total takeover of the competitor and/or the totally new line product/service aiming for the expansion of the market dominance of the group as a single operative unit.
The takeover is prompted by the availability of comparatively smaller operating unit which has been rendered uncompetitive in the market in which it operates. This could be due to internal problems (men, material, money and management) or due to external problems (competitions, technology, local laws, unknown future growth potential due to owners lack of fore sight in the future trends etc.).
Other points which prompt the takeover route are the expectation of additional product line and wider market access with the availability of the existing distribution network which saves time money and efforts for the organization going for the takeover. This takeover fever is fast spreading in the developed countries the USA and Japan and the developing countries are not far behind.
Export strategy planning is a very difficult and delicate subject and requires expert handling both at the corporate and operational levels. One mistake and you are back by couple of years from the target markets and some times out of the target markets.
Sometimes your strategy might be good but it may fail you at the implementation stage, but if you do both the exercises simultaneously in your boardrooms or the R&D centres involving the planners and the executioners together then the chances of its failures are minimized because whatever operational hurdles are anticipated they are solved and various contingencies plans conceived in advance.
In this way the planning and execution both get to know each other well in advance and when they are subjected to implementation the work is carried out systematically, smoothly, economically and in time for the launching in the market place.
3. Essay on the Distribution Logistics of Export Marketing:
This is the most important part of the export marketing and logistics dealing with the physical movement of the goods and services. It covers the area between the producer and the consumer. It also adds value to the goods and in many cases a deciding factor between the business gained and lost.
The logic behind this term is “delivery in perfect condition, on time, through the shortest possible route”. The key term is the “shortest possible route (SPR): to the customer or consumer”.
This SPR factor is dependent on the following factors:
(a) Point of production.
(b) Point of storage.
(c) Mode of transportation.
(d) Distance between the producer/supplier to the market place where it is exposed to the consumers for making final purchase.
(e) Distribution channels in the destination market (warehouse, whole sellers, retailers).
(f) Point of consumption.
Between a & f the costs addition stages are:
(i) Storage cost at the production side.
(j) Inland transportation up to the loading port.
(k) Custom clearance.
(l) Ocean transportation.
(m) Insurance.
(n) Unloading at the destination port.
(o) Duties and taxes in the destination country.
(p) Custom clearance.
(q) Transportation up to the ware-housing, whole seller.
(r) Transportation up to the point of sale.
(s) Commission for the whole sellers and retailers.
(t) Sales promotion in the destination country.
(u) Communication and administrative costs.
For entering the overseas markets the exporter depends on quality delivery and price. Quality is basic to the product pricing and has controls at the point of production, the other factor delivery casts heavy load on the final price to the customer. The overseas markets are highly competitive and many compatible brands fight for the market share.
The marketing mix has many other factors that determine the success of the product in the given overseas market but price is the synthesis of all such factors. The exporter has to evaluate his price to the customers and if it is not the winning price, he has to review alternatives to make it competitive.
For this evaluation there are two most important factors:
i. Logistics of point of production.
ii. Logistics of distribution.
The exporter tries to take above two factors one by one, if it still fails to move the goods in the market due price, then he combines the two factors and develops the fresh marketing strategy for market entry and expansion.
4. Essay on Cementing the Relations for Export Marketing:
As said earlier in this part that international business is an exercise in human relations and is an inter-cultural activity that brings people from different regions and continents speaking different languages and belonging to varied cultures, onto a common platform where one serves the other for mutual benefit.
This is an opportunity to develop and cement relationships lasting well beyond the confines of the international business. This helps not only to conduct business but also to expand it.
The best association of importers and the exporters or the buyer and seller is when both work together supporting each other through verbal and written modes of communications. The leading automakers of the world are at their present levels not of their own efforts; they are so because their vendors are dedicated.
They have developed the vendors to such high levels that each of them claim zero defect products or components and the man on the assembly shop does not bother to check whether component is good or not because they know there cannot be any defective part at all.
This situation of zero defect was not so easy to achieve, both the sides spent considerable time in perfecting the component and only when the component reached the level of zero defect, it was inducted in to the production line. There is another side of the story, the vendors that had the tendency to supply less than perfect components were discarded straight way.
Your support to your buyers is as important as the business itself. You have to create an impression on him that you do care for him.
There are many ways in which you can do this support activity, like:
(i) In the first place getting involved your technical people to interact with the technical people of your buyer or the importer. This exercise will create a common understanding technically so that what you ultimately produce is exactly what the other side requires from you.
Remember the methodology and/or the technology being used by your buyers have different operational environments and he perfected the application part of the technology to suit those environments.
But the operational environments prevalent in your set up are different so the same technology would require a modified application to turn out the end product fully compatible with the one produced or required by your buyer.
(ii) Always try to get the feedback on the supplies that you make to your buyers. This feedback will help you to overcome any bug that might still be stalking in your system.
(iii) The overseas buyers are constantly innovating, the earlier you know about them the better you would be equipped to handle the changes in the design of your product and this you can do only if you are in constant touch with your buyers. Generally this job is best done by periodic visits to your buyers.
(iv) Communicate with your buyers or the importers for any in-house product improvement that you have considered which can enhance the life or the efficiency, especially if it involves extra cost addition on the product.
(v) If you have any in-house journal have it sent to the importer or the buyer and if it contains any reference on your importer especially about their order, comments, any visit from them or to them, highlight that portion.
(vi) If you have any expansion programme that can give better service or additional product line, keep your buyers and importers informed about such programmes.
(vii) Keep track on your buyer’s and importer’s activities especially if they are being visited by your competitors or they are visiting your competitors, both movements should ring warning bells. Find out if there was something that you did or did not do which prompted your competitors to jump in.
(viii) The organizations do not have a face but the people in them do have and these people have their happy moments and sad moments, share them at personal level.
(ix) There might be instances when the ultimate consumers find faults and your importer or the buyer comes back to you pointing out the root cause of the problem emanating from the components that you supplied.
Never overlook such complains, attend to them on priority. These are the situations, which make or break the foundations of solid long-term associations.
Following two extreme examples would convey the message more explicitly:
Example 1:
(When the association was cemented by the actions of Indian component supplier)
An Indian supplier in Pune supplied the worm gears assemblies to a Japanese manufacturer. Technically these were okay and were used in the final products that were exported to USA. The consumer in USA reported breakdown of the control system of 10 nos. of the units to the Japanese supplier.
The cause of the trouble was found to be due to a small spring washer which broke down after the product was put to full load running. The Japanese importer immediately contacted the Indian supplier who conducted the tests on the individual spring washer and found that it did break down.
Immediately he air freighted not only another batch of the washers with higher strength but also 10 sets of the gears as free replacement/The old washers were replaced in all the products in the inventory and those sold out to ultimate customers with instructions for replacing the old washer. The whole operation was over in about a month.
The USA end user was impressed with the performance of the Indian supplier and together with the Japanese manufacturer visited the Indian manufacturer and placed bulk orders for yearly exports for three years at yearly rate contract basis.
Later the Japanese manufacturer was so pleased with the performance of the Indian manufacturer that he stationed one of his engineers at the Indian supplier to make sure that the problems do not recur and it never did recur.
Example 2:
(When the association was killed due to non-cooperation from the Japanese exporter/manufacturer.)
An Indian importer used to import specific steel material from a Japanese steel mill. The business continued for some time. In one of the imported lot the Indian importer found in one of the consignment that steel was not giving the required physical properties and defect was causing problems at the finished goods side.
The supplier was notified to rush their engineers to study the problem and find ways to rectify the same. It was the year end closing and the Indian importer was hard pressed to complete production target within the financial period.
The to and fro communication started taking longer time. In desperation the Indian side rectified the problem and used the material but notified the Japanese supplier about it and asked them to compensate for the expenditure incurred for rectification that was rejected. Ultimately the Indian side found another supplier and continued the business. But the relations with the original supplier were broken forever.
Miscellaneous Support Activities:
Any confidence building activity that is not discussed so far falls in this category. These activities may include even small gestures like the publicity material, calendars and diaries, greeting cards, cultural activities, written literature pertaining to management development – productivity – process control- innovative ideas, participative brain storming sessions etc.
These are but some of the activities that bring people together and creates a conductive atmosphere under which the parties try to find solutions to problems rather than to find problems.